Scottsdale building supply company to refund customers $162,000

Arizona Attorney General says Rastra, a building supply company, in Scottdale has agreed to refund $162,000 after failing to deliver construction materials.

Washington state industrial engineer Bill Setter had to find a new supplier for construction materials made of recycled plastic and concrete after Rastra Holdings of Scottsdale failed to deliver nearly $19,000 of material, he said. His house is on Whidbey Island in Puget Sound.(Photo: Handout)

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Rastra construction supply company agrees with Arizona Attorney General to pay customers

Company in Scottsdale markets construction blocks made with recycled plastic and concrete

Washington state industrial engineer Bill Setter, years before he started construction on his vacation home, knew he wanted to use an environmentally friendly construction material called insulated concrete forms.

He ordered nearly $19,000 worth of the blocks from Rastra Holdings, a Scottsdale-based company that markets and sells the items made from polystyrene waste, like used coffee cups, packing peanuts, and cement.

Setter expected more than 250 blocks, enough to build a two-bedroom vacation house on Whidbey Island in Puget Sound. But all he got was excuses on why they never were delivered, he said.

Setter was just one of approximately 15 consumers who complained to the Arizona Attorney General's Office about undelivered products from Rastra between 2012 to this year. That triggered an investigation under the Arizona Consumer Fraud Act.

Rastra president and owner Karl Holik entered into an agreement with the state of Arizona to pay $162,000 in consumer restitution, plus $9,500 to cover the cost of the state's legal fees and investigation, according to an agreement with the Attorney General's Office.

The agreement stated the company, based at 7621 E. Gray Road, did not keep up with orders for the product.

Rastra executives accepted down payments for orders knowing that the company did not have the capacity to ship the products, according to the Attorney General's Office. Executives then misrepresented to consumers that orders would be fulfilled by certain dates, then fabricated excuses such as weather problems, sickness, travel and other actions to prevent or delay complaints, according to the state.

Niether Holik nor the company admitted nor denied the state's allegations, according to the agreement. It was reached Oct. 26, but announced Monday.

The case was handled by Assistant Attorney General Jordan Christensen, who declined comment. Calls to Rastra on Monday went unanswered.

Setter, meanwhile, said he was impressed with the material when he helped a friend build a house with it a couple of years ago.

When the time came to build his own place in July 2014, he spoke with company executives extensively to order the blocks and related supplies, he said. But after he wired the funds, it was nearly impossible to get a return telephone call, he said.

When he did reach the company, employees gave him a stream of excuses, Setter said. After two months, he contacted the Arizona Attorney General's Office.

Then he got together with two other Whidbey Island, Wash., residents who had similar experiences and contacted the Attorney General's Office again. He considered a lawsuit against the company, but he said he couldn't find an attorney who thought there was any money to be gained from the company.

"We didn't want to do that. We wanted to build with this block. You're kind of trapped once you've designed it and engineered it," he said.

Setter placed a new order for materials with Rastra's supplier, Eterna Building System, based in Pima in eastern Arizona. That order was handled smoothly, he said.

He finished his single-level waterfront house in September.

"Hope to retire there in a few years, so it's a dream come true now," he said.

The plastic-and-concrete blocks were invented in Austria in 1972 and have been used in all types of climates around the world, according to the company's website.

The material received good reviews for both its environmental value and its construction benefits.

An article in 2006 in The New York Times noted: "The stuff is also practically indestructible. It is fireproof, resistant to high winds and in laboratory tests has withstood a simulated earthquake of 8.5 on the Richter scale. Termites can't eat it, nor can mold grow on it."